The 1996 Toyota Paseo was totally redesigned in 1996. On the outside, the Paseo got a sleeker front-end, a larger back end, and sleeker lines overall. The new Paseo got a number of new safety features, including include dual airbags and side-impact protection. A number of new upgrades are also available, including a moon roof, a higher-end sound system, and aluminum wheels. All Paseo engines were now rated at 93 horsepower.

The 1996 Toyota Paseo was available in one trim level, a two-door coupe. The engine was a 1.5-liter four-cylinder. A five-speed manual transmission was standard, with the option of a four-speed automatic. Fuel economy was about 26/34 mpg.

Drivers like the 1996 Toyota Paseo for its sporty looks, good fuel economy, and low price. They also like how reliable they are. Some Paseo fans were disappointed by the car’s new looks; they thought the new styling was more generic looking, and were particularly dismayed by the back end. Drivers also find the 1996 Paseo to be too small, especially in the back seat, and that it is underpowered.